How Digital innovation trends are shaping the insurance industry

The rapid pace of technology-driven changes is causing a fundamental transformation in many industries, remodelling them beyond recognition, worldwide. At the forefront of these changes, digital technology is creating new ways of designing and selling products, interacting with customers and processing backend transactions. Customer experiences created by that technology in other industries has created expectations for speed and superior customer experience that insurance must now meet.

Now that insurance is becoming more of a “pull” product, the industry will need to leverage new technology like Artificial Intelligence, Machine Learning, Big Data and Predictive Analytics to enhance the ability to draw in customers.

None of those revolutionary new capabilities will be possible without data.

Data transforms organizational capability

The most critical element of successful transition into this new paradigm is the resource that the insurance industry is built on--data. Companies that are 30, 50, even more than 100 years old have amassed unimaginable volumes of data on their clients. And today’s technologies are able to harness that information to turn it from a static collection of records into a key strategic asset.

These solutions feed on the vast repositories of information to revolutionize how enterprises operate, make decisions and interact with their customers. Analytics engines can mine the data, acting on it to turn it into actionable wisdom in the form of business intelligence. These technologies—implementing new techniques for data transformation such as machine learning and AI—are able to automatically and quickly harvest and analyze data, providing a deeper understanding of customer needs and enabling the creation of hyper-personalized digital experiences customers expect.

The rise of automation increases efficiency

Robotic Process Automation (RPA) and Artificial Intelligence (AI) programs have the ability to successfully replace low level repetitive customer-facing queries with automated processes that have very low error rates and increased fraud detection capabilities compared to traditionally manual processes. These automated workflows throughout the policy lifecycle can handle millions of inputs rapidly—greatly reducing time to response, resources needed and costs.

But machine-only solutions are not always the best answer. In many cases, where complicated sets of customer needs and complex products are in play, insurance companies are uniting software solutions with live agents to create a hybrid model that provides a highly accurate, fast and versatile customer contact solution.

These ‘centaur’ solutions, which combine the best of human and machine capabilities, are more efficient and effective than traditional approaches. They unite the speed and efficiency of digital processing with the expertise and judgement of experienced agents to tackle the most complex insurance challenges. They enable customers to research and compare solutions and then connect with an advisor for expert consultation when complexities arise. Advisors can utilize software solutions in conjunction with their own skillset to create optimal customer solutions.

Data provides more targeted products

Data patterns help insurers understand customer preferences, buying choices, lifestyle habits, product preferences and behavioural trends—at deeper levels than ever before. These insights can be used to develop new insurance products that are highly targeted to very specific customer needs and segments. These, more niche-oriented, products are valuable because there are always underserviced segments among customer pools, and the deep reach of digital technology allows insurers to target them with innovative micro-offerings. This approach is often used as a market entry strategy since, as products become increasingly individualized, they become more attractive to customers and more likely to find success in the market.

Hyper-personalized experiences

The consumer appeal of increasingly individualized insurance products is enhanced by the new capability to create hyper-personalized experiences around them. Using the vast volumes of data available and the analytics that draw actionable insights from them, insurers are able to build more of the targeted customer experience people have grown used to in their interactions with everyone from Amazon to Netflix.

Marketing can be targeted to customers at the moment they have a need versus the traditional scattergun approach, meaning higher conversion and greater customer satisfaction. Omni-channel capabilities mean customers are able to find information, make purchases, and receive service whenever and however they choose. And all interactions will happen in almost real-time.

All of that combines to greatly reduce customer frustration over receiving communications they don’t want, having to wait to receive even the most basic updates (such as policy statements) and having to travel to a branch office to do business. Instead, life insurance customers can enjoy the same accelerated, personalized buying experience they have in any other online transaction.

Rana Biswas, Vice President, Wealth & Insurance Solutions APAC, Equisoft

Accelerating the entire policy lifecycle

When data analytics, APIs, data analytics and AI come together they can speed application, approval and onboarding—reducing processing time from days to minutes. And they provide a substantial improvement in underwriting accuracy and pricing of policies as well as detection of false claims. This enables insurers to accurately charge low-risk customers lower premium amounts and also pay fewer claims.

As a result of the tight integration of digital service and sales tools with modern policy admin systems, companies are able to create digital workflows that accelerate claims submissions, decisions and payments. Accelerated processing and payment of claims greatly increases customer satisfaction and builds deeper client relationships.

Putting it all together

Traditionally, insurance products were primarily sold by face-to-face interaction, however, now preferences have skewed towards digital and the insurance sector seems to be rapidly becoming an online marketplace. Technologically, India too is rapidly transforming into a major digital economy, and this is being driven by the fast rise of smartphone adoption as well as the allied innovation ecosystems being driven by internet technologies. It’s time for insurance companies to step up their digital transformation and keep abreast of this change.

Authored By - Rana Biswas, Vice President, Wealth & Insurance Solutions APAC, Equisoft